What are the expected cash collections .What would budgeted sales revenue be?

Use the following sales budget information to answer question 1:
July $100,000 October $ 90,000
August $ 80,000 November $100,000
September $110,000 December $ 94,000
Historically, cash collection of sales has been:
65% of sales collected in month of sale
25% of sales collected in month following sale
10% of sales collected in second month following sale

Use the following information to answer question 2:
Caps, Inc. has the following budget for the production and sale of 1,000 caps:
Sales revenue $8,500
Cost of goods sold $5,000
Fixed expenses $2,500
Income $1,000

3. If the product is sold in the external market at full cost plus a 25% markup, and all
production can be sold, what is the appropriate transfer price?
A. $9.00 C. $11.25
B. $9.80 D. $12.25

4. Lucky Duck, Inc. had sales of $550,000 and net operating income of $275,000.
Beginning of the year operating assets were $125,000 and end of the year
operating assets were $175,000. What asset figure is used to compute the return
on investment?
A. $125,000 C. $175,000
B. $150,000 D. $200,000

Use the following purchases budget information to answer question 6:
July $100,000 October $ 90,000
August $ 80,000 November $100,000
September $110,000 December $ 94,000
Historically, one half is paid at the time of purchase and the remainder in the month
following purchase.

7. Which of the following is a drawback of return on investment (ROI)?
A. Accounts receivable and inventory figures are generally difficult to measure.
B. ROI ignores the book value of assets.
C. ROI may discourage managers from replacing old assets like
manufacturing equipment.
D. Use of different depreciation methods doesnâ€™t affect the ROI calculation.

8. If standard direct labor costs for the production of one unit are 2 hours @ $15 per
hour, and actual direct labor costs for the production of 1,000 units are 1,950 hours @
$15.25 per hour, what is the labor rate variance?
A. $500 F C. $487.50 F
B. $500 U D. $487.50 U

Use the following sales forecast information to answer question 9:
January 15,000 cars
February 12,000 cars
March 16,000 cars
April 15,000 cars

9. Each car requires four wheels, and 30 minutes of labor time at a rate of $12 per hour.
Januaryâ€™s beginning balance of wheels is 6,000. What is the direct labor budget for
March?
A. $96,000 C. $192,000
B. $187,200 D. $202,500

10. If the product can be sold to an external purchaser for full cost plus a 20% markup,
what is the minimum transfer price, assuming no contribution margin loss on outside
sales exists?
A. $1.75 C. $3.00
B. $2.25 D. $3.60

11. Nickerson, Inc. has developed a variable-overhead rate of $10 per machine hour and
estimates fixed overhead at $250,000 for production up to 100,000 units per year. If the
production manager estimates 9,000 machine hours for the production of 90,000 units
next year, what are estimated variable-overhead costs?
A. $90,000 C. $340,000
B. $250,000 D. $900,000

Use the following information to answer question 15:
Units started into productionâ€”1,200,000
Total good units completedâ€”1,115,000
Total hours of value-added production timeâ€”575,000
Total production hoursâ€”750,000

16. Actual variable-overhead expenses were $33,750 for production of 6,000 units. Variable
overhead is applied at a rate of $3.00 per direct labor hour, two direct labor hours are
budgeted for each unit, and 11,990 direct labor hours were incurred. What is the total
variable-overhead variance?
A. $2,250 F C. $2,220 F
B. $2,250 U D. $2,220 U

Use the following sales forecast information to answer question 17:
January 15,000 cars
February 12,000 cars
March 16,000 cars

17. Each car requires four wheels, and requires 30 minutes of labor time at a rate of $12
per hour. Januaryâ€™s beginning balance of wheels is 6,000. If the company tries to
maintain 10% of the next monthâ€™s forecasted production needs in inventory, what are
the projected wheel purchases for February?
A. 12,000 C. 49,600
B. 13,600 D. 72,300

19. What is the monthly net income for Division A?
A. $2,000 C. ($4,000)
B. $1,000 D. ($1,000)
12
Use the following information to answer questions 20 and 21:
Tie One On budgeted for production and sales of 12,000 silk ties, but actually produced
11,000 and sold 10,500. Each tie has the following standards: 1 foot of material
at a budgeted cost of $1.50 per foot and 20 minutes of sewing time at a cost of $0.25
per minute. The ties sell for $8. Actual material costs for the production of 11,000 ties
were $1.54 per foot. Actual total sewing time was 242,000 minutes and labor costs
were $0.24 per minute.

25. Tea Leaves, Inc. has a policy of maintaining 20% of the next yearâ€™s expected sales
in the ending inventory of any year. During 20x7, they budgeted and sold 120,000
tea bags. Sales of 125,000 tea bags are budgeted for 20x8. How many bags were
purchased during 20x7?
A. 120,000 C. 125,000
B. 121,000 D. 145,000

Feb 28 2012 07:23 AM

1 Approved Answer

Mittul T
answered on February 08, 2015

4 Ratings,
(9
Votes)

Use the following sales budget information to answer question 1: July $100,000 October $ 90,000 August $ 80,000 November $100,000 September $110,000 December $ 94,000 Historically, cash collection of sales has been: 65% of sales collected in month of sale 25% of sales collected in month following sale 10% of sales collected in second month following sale 1. What are the expected cash collections in September? D. $101,500 Use the following information to answer question 2: Caps, Inc. has the following budget for the production and sale of 1,000 caps: Sales revenue $8,500 Cost of goods sold $5,000 Fixed expenses $2,500 Income $1,000 2. If 900 caps were sold, what would budgeted sales revenue be? B. $7,650 Use the following unit cost information to answer question 3: Direct materials $2.50 Direct labor $4.50 Variable overhead $2.00 Fixed overhead $0.80 3. If the product is sold in the external market at full cost plus a 25% markup, and all production can be sold, what is the appropriate transfer price? D. $12.25 4. Lucky Duck, Inc. had sales of $550,000 and net operating income of $275,000. Beginning of the year operating assets were $125,000 and end of the year operating assets were $175,000. What asset figure is used to compute the return on investment? A. $125,000 Use the following information to answer question 5: Warranty claimsâ€”$120,000 Product liability lawsuitsâ€”$200,000 Rework costsâ€”$600,000 Quality...

€”$350,000 Inspection of incoming materialsâ€”$900,000 Total yearly salesâ€”$50,000,000 5. What are total internal failure costs? C. $600,000 Use the following purchases budget information to answer question 6: July $100,000 October $ 90,000 August $ 80,000 November $100,000 September $110,000 December $ 94,000 Historically, one half is paid at the time of purchase and the remainder in the month following purchase. 6. What are the expected cash disbursements in August? B. $90,000 7. Which of the following is a drawback of return on investment (ROI)? C. ROI may discourage managers from replacing old assets like manufacturing equipment. 8. If standard direct labor costs for the production of one unit are 2 hours @ $15 per hour, and actual direct labor costs for the production of 1,000 units are 1,950 hours @ $15.25 per hour, what is the labor rate variance? C. $487.50 F Use the following sales forecast information to answer question 9: January 15,000 cars February 12,000 cars March 16,000 cars April 15,000 cars 9. Each car requires four wheels, and 30 minutes of labor time at a rate of $12 per hour. Januaryâ€™s beginning balance of wheels is 6,000. What is the direct labor budget for March? A. $96,000 Use the following product unit costs to answer question 10: Direct materialsâ€”$0.75 Direct laborâ€”$1.00 Variable overheadâ€”$0.50 Fixed overheadâ€”$0.75 10. If the product can be sold to an external purchaser for full cost plus a 20% markup, what is the minimum transfer price, assuming no contribution margin loss on outside sales exists? D. $3.60 11. Nickerson, Inc. has developed a variable-overhead rate of $10 per machine hour and estimates fixed overhead at $250,000 for production up to 100,000 units per year. If the production manager estimates 9,000 machine hours for the production of 90,000 units next year, what are estimated variable-overhead costs? A. $90,000 Use the following production time estimates to answer questions 12 and 13: Wait timeâ€”10 hours Inspection timeâ€”1 hour Processing timeâ€”36 hours Move timeâ€”1.5 hours 12. What is the manufacturing cycle time? D. 48.5 hours 13. What is manufacturing cycle efficiency? (Round your answer to the nearest percent.) B. 79% Use the following segment information to prepare an income statement using the contribution format and answer question 14: Sales Revenueâ€”$350,000 Variable Costs: Productionâ€”$175,000 Selling, General, & Administrativeâ€”$75,000 Traceable Fixed Costs: Productionâ€”$50,000 Selling, General, & Administrativeâ€”$32,500 Operating Assetsâ€”beginning of the yearâ€”$40,000 Operating Assetsâ€”end of the yearâ€”$44,000 14. What is the segmentâ€™s return on investment? (Round your answer to two decimals.) B. 41.67% Use the following information to answer question 15: Units started into productionâ€”1,200,000 Total good units completedâ€”1,115,000 Total hours of value-added production timeâ€”575,000 Total production hoursâ€”750,000 15. What is the throughput per hour? (Round your answer to two decimals.) C. 1.94 16. Actual variable-overhead expenses were $33,750 for production of 6,000 units. Variable overhead is applied at a rate of $3.00 per direct labor hour, two direct labor hours are budgeted for each unit, and 11,990 direct labor hours were incurred. What is the total variable-overhead variance? C. $2,220 F Use the following sales forecast information to answer question 17: January 15,000 cars February 12,000 cars March 16,000 cars 17. Each car requires four wheels, and requires 30 minutes of labor time at a rate of $12 per hour. Januaryâ€™s beginning balance of wheels is 6,000. If the company tries to maintain 10% of the next monthâ€™s forecasted production needs in inventory, what are the projected wheel purchases for February? C. 49,600 Use the following monthly data regarding each division within a company to answer questions 18 and 19: Division A Division B Division C Revenues $15,000 $15,000 $20,000 Variable Costs $12,000 $10,000 $8,000 Contribution Margin $3,000 $5,000 $12,000 Traceable Fixed Costs $2,000 $2,000 $8,000 Common fixed costs of $6,000 are divided equally among divisions. 18. What is the companyâ€™s monthly net income? D. $2,000 19. What is the monthly net income for Division A? D. ($1,000) 12 Use the following information to answer questions 20 and 21: Tie One On budgeted for production and sales of 12,000 silk ties, but actually produced 11,000 and sold 10,500. Each tie has the following standards: 1 foot of material at a budgeted cost of $1.50 per foot and 20 minutes of sewing time at a cost of $0.25 per minute. The ties sell for $8. Actual material costs for the production of 11,000 ties were $1.54 per foot. Actual total sewing time was 242,000 minutes and labor costs were $0.24 per minute. 20. What was the budgeted contribution margin per tie? D. $1.50 21. What was the actual contribution margin per tie? A. $1.18 Use the following sales forecast information to answer question 22: January 15,000 bags February 12,000 bags March 16,000 bags 22. If the company maintains 10% of the next monthâ€™s forecasted sales in inventory, what is the projected production for January? A. 14,700 Use the following information to answer questions 23 and 24: Budgeted production and salesâ€”5,000 units Actual production and salesâ€”6,000 units Direct material standardsâ€”1.5 pounds of material @ $1.52 per pound Direct labor standardsâ€”2 hours of assembly time @ $12.50 per hour Sales priceâ€”$32 Actual direct material costsâ€”8,600 pounds @ $1.50 per pound Actual direct labor costsâ€”13,200 hours @ $12.25 per hour 23. What is the flexible budget variance? A. $9,100 F 24. What is the sales volume variance? C. $4,720 25. Tea Leaves, Inc. has a policy of maintaining 20% of the next yearâ€™s expected sales in the ending inventory of any year. During 20x7, they budgeted and sold 120,000 tea bags. Sales of 125,000 tea bags are budgeted for 20x8. How many bags were purchased during 20x7? B. 121,000

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